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President Biden continues to face a recession. He has no assurances that Republicans will refrain from forcing the US Treasury to default anytime in the next two years. For now, however, he can take comfort in a slew of good economic news.
Most important was the dog that didn’t bark. More specifically, the rail strike, which will not happen. In a painful but responsible split from organized labor, the White House pushed a bipartisan agreement through Congress to push through the final labor agreement between railroad companies and unions, averting a crippling work stoppage this month.
Although Republicans rejected a proposal to increase the number of sick days for railroad workers from one to seven, the Senate voted 80 to 15 to end fears of a strike that could have put hundreds of thousands of people out of work and brought the holiday shopping season to a halt. Among the Democrats, only Senator Joe Manchin III of West Virginia voted against including sick days in the employment contract; all but six Republicans opposed the legislation.
Biden praised the passage of the deal on Thursday. “Congress’s decisive action ensures we avoid the looming devastating economic consequences for workers, families and communities across the country,” he said.
consequences Jennifer Rubin’s opinionconsequences
The news came shortly after the Bureau of Economic Analysis reported that personal consumption spending rose 0.8 percent in October. Meanwhile, third-quarter growth was higher-than-expected at 2.9 percent. If we are looking for steady, sustainable growth, this number is the right one.
And despite these growth figures, inflation eased somewhat. The Wall Street Journal reported, “The personal consumption price index rose 6% in October from the same month last year, marking a decline from 6.3% in September.” Excluding volatile food and energy costs, core inflation rose in the October by 5 percent compared to the previous year.
This explains why Federal Reserve Chair Jerome H. Powell said earlier in the week, “It makes sense to slow the pace of our rate hikes as we approach the level of dovishness sufficient to bring inflation down . The time to slow the pace of rate hikes could come as early as the December meeting.”
To top it off, gas prices continued to fall, mainly due to a drop in global demand. The average gallon price is now lower than when the war started in Ukraine. That, too, will help keep the money in consumers’ pockets just as they head out to do their Christmas shopping.
Biden released a statement Thursday of cautious optimism: “We’re seeing early signs that we’re making progress in fighting inflation, even as we make the transition to steadier, more resilient economic growth.” He added, “It will take time.” “We are trying to bring inflation back to normal — and there may be setbacks in the process — but the American people should have faith in our plan to fight inflation, without giving up all of the historic economic gains that American workers have made, that is working.”
Finally, the week ended with a positive jobs report for November. The economy added 263,000 jobs and kept the unemployment rate at 3.7 percent. Despite layoffs in the tech sector, job growth remained remarkably resilient and wages rose 0.6 percent.
The White House’s cautiously positive approach is wise. The mantra of underpromising and overperforming has worked for Biden before. The majority of outside economists and business leaders expressed certainty that a recession is imminent. Hasn’t virtually every attempt to contain inflation by raising interest rates been followed by a recession? Yes, but it’s also possible that the economy is on a flight path to a soft landing and a return to normal inflation and economic growth.
While economic fortunes can still turn for the worst, it looks like Biden’s economic performance will certainly deliver solid results that contrast vividly with the rest of the world. Quite simply, Biden couldn’t have asked for better year-end economic news.
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